I repost here a thread I started here at Kitco: https://www.kitcomm.com/showthread.php?p=625321&posted=1#post625321 Comments welcome. I tried to post this on UC Berkeley professor Brad DeLong’s site but his blog is apparently closed to comments, so I’ll post it here. I refute Say’s Law, which is…

I’m sorry to be so abrupt, but this so called “refutation of Say’s Law” is nothing of the sort. Clearly this is due to your erroneous characterization of Say’s Law as being neatly summed up in “supply creates its own demand”, which you’ve mistakenly taken literally to mean that for Say’s Law to hol…

Say admits that there can be short-term gluts of a commodity. However, this can only happen if supply has outstripped demand or others do not have goods to exchange in return. Say very precisely deals with the first point by showing that the profit and loss mechanism in production will drive produce…

Your ostensible self-verification of the post above is unsettling, as its simply flat out wrong. Seems nefarious and manipulative. ======== I made the italicized point above. How can you claim Say’s law fails if what happens in the short term is what Say’s law predicts? Again, Keynes simply ad…

Apparently Mr. Lopez’s self-verification was thwarted while I was composing the above post.

Sir: Take careful note of this statement: “Say admits that there can be short-term gluts of a commodity.” This statement refers to a glut in a particular market, not a glut in the entire economy. The conceptual difference between the two could not be greater in terms of implications for business …

Say’s Law would NOT imply anything about aggregate supply shifting to match a new lower level of aggregate demand. You are missing the entire point of Say’s Law - namely, that the business cycle cannot be caused by endogenous demand shocks. In his analysis, no general glut of “aggregate supply” can…

Austroglide -[is your handle a play on words involving something that is a force fit and requires lubrication?] - thanks for your Austrian interpretation of Say’s Law. Believe it or not, I really was trying to understand the Austrian position on Say’s Law–and I think I finally got it. It’s absurd, j…

I don’t believe you, on either point. Say mentions natural disasters and government policies (I assume epidemics would be seen as quite similar to natural disasters) as the only exceptions to his analysis. When I said Say recognizes no possibility for endogenous demand shocks, these were his only…

The last seven months have nothing to do with AD causing business cycles, and everything to do with the boom phase coming to an end, in which case, in response to the realisation that supposed wealth was illusory, demand will collapse, i.e. fall in AD is a symptom or phase or effect of a business c…

Say's Law: a lynchpin of Austrian Economics--is it dead?

Economics Economics Questions

RayLopez April 19, 2009, 12:37pm 41

On price stickiness (a consequence of Money Illusion) see this thread: Keynesian Money Illusion: does it work?

Please post your replies there.

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Say's Law: a lynchpin of Austrian Economics--is it dead?

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